Reno built a lot of small apartment buildings between the 1960s and the 1980s: two-story stucco six-plexes and eight-plexes near the university, in Midtown, along the Wells Avenue corridor and in older Sparks. Under our programs they are residential property, so a DSCR loan qualifies them on combined rent.
In short: LendingStreet offers DSCR loans on 5 to 8 unit residential buildings in Reno, Sparks and Washoe County, qualified on the combined rent of all units with no W-2s or tax returns. Loans start at $150,000 with no stated maximum, maximum LTV varies by program and is often lower than on 1-4 units, and LLC borrowers are standard. Buildings of nine or more units go to our commercial programs.
The densest concentration is around the University of Nevada, Reno, north of downtown, and in the neighborhoods between Midtown and Wells Avenue. Older Sparks near Victorian Avenue and the streets off Prater Way have a similar mix. Many of these buildings are two-story walk-ups with exterior stairs, surface parking and one- and two-bedroom units that rent to students, service workers and young professionals.
These buildings often trade between local owners without wide marketing. A buyer who arrives with a clear plan for deferred items and financing already lined up can move faster than one still sorting out a loan.
Every unit's rent is added together and compared with the monthly payment, which includes principal and interest, property taxes, insurance and any association dues. The appraisal will list a market rent for each unit and lean on the income approach. Plan to provide a rent roll and leases, and possibly an operating statement. Maximum LTV depends on the program and usually sits below what a fourplex can get.
Few six- and eight-unit Reno buildings sell in any given year, so appraisers often rely on income. Leases that match the rent roll and deposits that match the leases make that approach much easier to defend.
This example is illustrative and not a quote. An investor buys a 1970s six-unit building for $1,200,000. Units rent from $1,300 to $1,500, totaling $8,400 a month. Taxes are budgeted at $520 a month and insurance at $560.
At 70% LTV the loan is $840,000, estimated principal and interest is about $5,730 and the total payment is about $6,810, for a DSCR of about 1.23x. At 75% LTV, where a program allows it, the loan is $900,000, the payment about $7,220 and the DSCR about 1.16x.
The ratio is healthy at both leverage levels in this example, but notice how much the payment moves with five percent more leverage. On a building this size, a modestly lower loan amount often buys a much larger cushion against vacancy and repairs.
| Unit | Monthly rent |
|---|---|
| Unit 1 | $1,300 |
| Unit 2 | $1,350 |
| Unit 3 | $1,375 |
| Unit 4 | $1,425 |
| Unit 5 | $1,450 |
| Unit 6 | $1,500 |
| Total | $8,400 |
Nevada's tax system often leaves older apartment buildings with modest tax bills, which helps the ratio. Insurance can move the other way. Older wood-frame buildings with exterior stairs, aging roofs and original electrical can draw higher premiums, and the Reno area's earthquake exposure leads some owners to add separate earthquake coverage. Get a full building quote early, because on a 5-8 unit property the insurance line is large enough to move the DSCR.
Ask the seller for any recent inspection or insurance loss history on the building.
Plan for these when you inspect.
Budget for these before you set your offer. Exterior stairs and balconies in particular can carry safety and insurance consequences, and roof replacement on a flat-roof building is a significant capital item.
Buildings near campus often lease to students on academic-year schedules, which brings turnover every summer. Buildings in Sparks and closer to the industrial corridors lease to workforce tenants on 12-month leases. Lenders underwrite on market rent for the legal unit configuration, so a stable, documented rent roll matters more than projected increases.
A consistent leasing calendar, with renewals tracked and units turned quickly, is one of the clearest signs to an underwriter that the building is well run.
Many older Reno buildings have one water meter and owner-paid trash and common-area power. Those costs are not part of the DSCR formula, but they shape real cash flow. Ask the seller for twelve months of utility bills and consider whether submetering or billing back utilities is allowed and practical for the building.
Buildings with empty units or rents far below market are often better bought on a bridge loan, renovated and leased, then moved to a DSCR loan sized on the higher rent roll.
Water conservation rules in the Truckee Meadows can also affect landscaping costs, so a building with turf may cost more to maintain than one already converted to drought-tolerant landscaping.
Have these ready to speed up review.
A ninth unit moves the property into commercial lending, covered on our multifamily loans page. For 5-8 units, use the form below or call (877) 298-1001 with the rent roll and address. Our investor loans are business-purpose loans on non-owner-occupied property. Statewide notes are on our Nevada 5-8 unit page.
Yes. Our programs treat 1-8 units as residential DSCR property; nine units and up is commercial.
It varies by program and is often lower than on 1-4 unit properties.
No. Only principal, interest, taxes, insurance and association dues are in the formula, but owner-paid utilities still reduce cash flow.
Yes. The loan is underwritten on market rent for the legal unit configuration.
Yes. Some programs can use market rent for vacant units, and a bridge-then-refinance plan is another route.
If you carry it, the cost is part of insurance. Ask how your program treats it when you request a quote.
The floor is still 620, but better credit can improve the leverage available on a larger building.
Yes, once you have five or more properties, a blanket portfolio loan can combine them.
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